BackLloyd’s hopes to start insurance operations in India in a year
Lloyd's chairman says discussion with Irda going well
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New Delhi: Encouraged by the government’s decision to push insurance sector reforms, UK-based re-insurance firm Lloyd’s on Thursday said it expects to start operations in India in the next one year. “I think it would depend on discussion with the Insurance Regulatory and Development Authority (Irda), they are going well. Starting operation takes time because we have to get various regulatory approvals including management structure ... it will take a little while," Lloyd’s chairman John Nelson said. “What is important is the forward movement. The moment is going good and I don’t think anything in 2015 but thereafter it will pick up," he said.
Asked if it can happen in 2016, he said, “We want to move decisively... I think over the next six months to over a year you would see some activity." Irda chairman T.S. Vijayan had in the past also confirmed that Lloyd’s has approached the authority and is in discussion for setting up operations in India. Welcoming the passage of insurance amendment bill 2015, Nelson said, “We are pleased with the support we are receiving from the Indian government and authorities for opening up the market." India is a very important market for Lloyd’s, he said.
Earlier this month, Parliament had passed the bill which seeks to increase foreign investment in private sector companies to 49% from the existing 26%, among other things. The amended law, passed by Parliament last week, enables foreign re-insurers to set up branches in India and defines ‘re-insurance’ to mean ‘the insurance of part of one insurer’s risk by another insurer who accepts the risk for a mutually acceptable premium’. It, thereby, excludes the possibility of 100% ceding of risk to a re-insurer, which could lead to companies acting as front companies for other insurers.
“Lloyd’s is the world’s specialist insurance market. Unlike many other insurance brands, Lloyd’s is not a company; it’s a market where our members join together as syndicates to insure risks," the company website said. The Lloyd’s market is home to 94 syndicates, which offer an unrivalled concentration of specialist underwriting expertise and talent, it said. Meanwhile, Lloyd’s on Thursday posted a pre-tax profit of $4.9 billion with a return on capital of 14.7%. “In the face of global challenges, an abundance of capital and the low interest rate environment, Lloyd’s is being proactive in seizing the opportunities out there for growth and diversification, Nelson said. “We will continue to engage with our global network of syndicates and brokers, to ensure Lloyd’s remains at the forefront of innovation in the industry," he added.
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